Date 26 Dec 2024
The Spanish real estate market continues to expand and forecasts for 2025 indicate that both prices and sales will continue to rise. According to experts, we are experiencing a real estate boom driven by key factors such as lower interest rates, increased demand and insufficient supply.
Continued Growth in Sales and Prices
The sales figures for 2024 will close with more than 600,000 transactions, a number not seen since 2007. This dynamism is largely due to the improvement in mortgage conditions and the interest of both national and international investors. María Matos, director of Studies at Fotocasa, predicts that in 2025 the figures could even exceed these records.
For his part, José María Ibáñez, president of Grupo Tecnitasa, points out that the annual demand for new housing in Spain is around 200,000 units, while the supply barely reaches 100,000. This gap between supply and demand continues to push prices up.
Price Increase Forecast in 2025
Experts anticipate price increases during 2025, although moderately. New-build homes could rise by around 7%, while second-hand homes would rise by between 3% and 5%. However, some analysts, such as Gonzalo Bernardos, estimate increases of up to 15% in new construction.
The Impact of the Fall in Interest Rates
The European Central Bank will continue to reduce interest rates, which will translate into more affordable mortgages. This will encourage purchase demand and continue to boost the real estate market, especially in large cities and coastal regions.
Insufficient Supply in the New Build Market
The supply deficit remains one of the main challenges. Spain needs to build more homes to meet the growing demand. Currently, practically all new build homes that come onto the market are sold, with prices increasingly high.
Areas of Greatest Growth
Cities such as Madrid, Barcelona, ​​Alicante and Valencia lead the price growth. Madrid has seen increases of up to 20% year-on-year, while Barcelona, ​​with a more limited supply, has grown by 8.5%. Tourist and coastal areas, such as the Balearic Islands, also show strong revaluations.
In contrast, in ’empty Spain’, although prices are also increasing, they are doing so at a more moderate pace due to less intense demand.
Conclusion: A Real Estate Market in Full Effervescence
The Spanish real estate market faces a 2025 marked by continued growth in prices and sales. Opportunities will continue to be attractive for buyers and investors, especially in regions with high demand. However, the challenge of increasing supply remains key to ensuring a sustainable balance in the Spanish residential market.